-- Posted Monday, April 27 2009 | Digg This Article | Discuss This Article - Comments:

Cameco’s stock on the Toronto Stock Exchange, symbol CCO, broke out on the chart on Friday, cresting through the CAD$24.50 resistance level.

Cameco, despite being the industry leader in terms of uranium production, has been the laggard stock in the uranium sector.  The intermediate and even junior producers – notably low-grade producers Paladin Energy (PDN-TSX)and Uranium One (UUU-TSX) – have been in a steady uptrend for weeks.

The uranium price has posted two consecutive “up” weeks, with gains of $1.50 and 50 cents through mid-April.

Research reports from brokerage houses have been crying for months that the gap between the spot price of $40/lb and the long term price of $70/lb must be closed.

Certainly the producers will continue to benefit if the uranium prices keep rising.  But the junior explorers and near-term producers have far more leverage, as their stock prices were pummeled mercilessly, starting even before the market crash of October 2008.

Here is a brief list of a few development and exploration plays that are moving towards production and/or have real resources.

UR Energy (URE-TSX; $1) is developing the Lost Creek and Lost Soldier deposits in Wyoming, USA.  Wyoming is a well known uranium area.  Both deposits are ISL, or in-situ leaching, where water is pumped down into the ground, and dissolved the uranium. The water comes back up and the uranium is precipitated out. The company has $65 million cash, 8.5 million pounds compliant and 8 analysts cover the story.

Uranium Energy Corp (UEC-AMEX; $1) has many uranium projects in the USA, but its lead asset is the Goliad project in Texas. It is also an ISL project, but only 7 million pounds.  They have received a draft mining permit, and this, the market believes, makes them a near term producer. Four analysts cover UEC.

Uracan Resources (URC:TSXV; $0.24) is an advanced stage explorer, with more than 40 million pounds of compliant uranium resources, at surface and close to infrastructure, located in Quebec Canada.  Already one of the largest resources in Canada, their Double S deposit remains open in all directions and at depth.  They are finding 1000 pounds of uranium resource for every metre drilled. Only Canaccord covers URC.

Mega Uranium (MGA-TSX; $2) also has roughly 40 million pounds of compliant resources, though spread over several projects.  They have a very strong financial management team, and have more than $40 million cash.  Their key assets are in Australia, which has just opened up to uranium mining. Only one analyst covers Mega.

There are many other uranium companies with interesting stories – these four are some of the more advanced explorers and developers which should benefit from the next layer of investor attention that the uranium sector gets.

And now that Cameco has broken out on the charts, that next layer is happening now.

-- Posted Monday, April 27 2009 | Digg This Article | Discuss This Article - Comments: